If Congress votes to increase spending and taxes by the same amount, what is the effect on employment and interest rates?

Employment / Interest Rates

Increase / Increase

Increase / Decrease

Increase / No Change

Decrease / Decrease

Decrease / No Change

Increase / No Change

Explanation:

The Congress is then legislative arm of government which makes the laws governing the country.

When there is an increase in spending and taxes by the same margin, it has effects on the employment and interest rates. The employment rate increases because the taxes are usually from the workers . The interest rates however remains constant as increase in spending and taxes is not a strong determinant factor for interest rates.